Position yourself for growth in 2017—join us live at the Entrepreneur 360™.
Flash Sale—save up to $200 on registration. Ends Thursday. Secure Your Seat »
Lawyers are famous for impenetrable jargon, but when Jeffrey Unger talks about how he practices law like an entrepreneur, his words are crystalline. "It means I am willing to make an investment of time and capital to grow this business like my clients do," says the 35-year-old Beverly Hills, California, attorney.
In any language, Unger's approach to running a law firm is decidedly entrepreneurial. While developing a specialty providing incorporation services to business owners, he's invested a six-figure sum creating technology to speed up and streamline the process using Web-based information-gathering tools. He has an annual marketing budget that he invests in advertising in trade publications serving accountants (a key referral source), circulating a free e-mail newsletter to 4,000 CPAs and others, and speaking throughout California to provide continuing education to accountants.
In six years, Unger has grown his firm to 10 employees and has a client base stretching from Chico, in Northern California, to San Diego in the south. He's also become a shining example of a professional services provider who runs his company like an entrepreneur. Attorneys, doctors, dentists, engineers and other professional service providers have reputations for being stodgy and unenterprising in the way they do business. But that's mainly a bad rap, according to Doug Hall, an Austin, Texas, business consultant who advises professionals on client retention. "A small law firm or engineering firm is run [in an entrepreneurial way] because there's no choice," says Hall.
Take Rebecca Jensen, 36, owner of The Accounting Source in Spokane, Washington. Jensen left an accounting job in Seattle to become an entrepreneur so she could spend more time with her children. With her husband, Todd, as the company's operations manager, she's crafted an innovative accounting enterprise that markets energetically, embraces new technology, and tirelessly develops new products and services for its markets. "The opportunity to practice my profession as an entrepreneur is extremely important to me," she says. Her secret? "You have to be able to put on different hats and be willing to learn and grow in different areas, as well as know when you need to outsource."
Make It Work
You can grow your professional practice like an entrepreneur if you come up with innovative solutions to your special problems. For example, professionals often find that their management skills are doubly stressed because few are trained to manage or communicate with nonprofessionals. "I don't know how to talk nondoctor," admits Dr. Adam D. Singer, co-founder, chair and CEO of IPC - The Hospitalist Company, a North Hollywood, California, company that supplies physicians trained to care for hospitalized patients. Singer's solution is to hire nonprofessional managers who have the skills he lacks. Says Singer, 44, "You really need two leaders."
Next, face and overcome the challenge of managing other professionals. "Managing other lawyers is like herding cats," Unger says. But he's got a solution: Corral the cats with technology that lets his firm grow without hiring additional professionals. Web-based collaboration allows him to use paralegals, who are less costly-and more easily managed-than the attorneys that a less automated firm would have to hire.
You can also help grow your firm by opening your mind to outside experts and ideas, says Jeffrey J. Denning, a consultant with Practice Performance Group, a La Jolla, California, firm that advises physicians on how to better manage their practices. "Reporting to a committee of doctors is not the way a professional manager wants to work," says Denning. "He wants to report to an enlightened entrepreneur who understands what he's doing."
Marketing may be your biggest challenge, but you can overcome barriers of regulation, tradition and lack of training to market your services-if you're willing to work at it, be creative and sometimes take risks. Unger, for instance, copes with rules that prohibit him from soliciting paid referrals by actively developing nonfinancial relationships with referral sources. "It has to happen slower and through more nontraditional channels," he explains. But it happens.
You can make it happen faster if you do like other professionals who have gone so far as to challenge legal restrictions. Accountants won the freedom to solicit new business a decade ago in a controversial U.S. Supreme Court ruling. Today, they are free to engage in sophisticated marketing efforts, like the Jensens', incorporating direct mail, telemarketing and cold-calling.
Todd Jensen, 37, who oversees The Accounting Source's marketing efforts, developed his approach with the help of a consultant who specializes in teaching accountants how to market their services. With a team of telemarketers calling to set appointments to meet with local businesspeople, Todd was soon doing five sales calls a day. "I did that for six months," he says. "And the [number] of clients coming in was more than we could handle. My wife said to slow down."
Don Uhl, a Williamstown, New Jersey, consultant who trains accountants to be entrepreneurial, says most professionals find that a relatively modest amount of marketing expertise and energy goes a long way. "That's the beauty of it," he says. "So few are marketing and being entrepreneurial that those who do are extremely successful." He advises professionals to start by setting aside a percentage of their budgets for marketing. Uhl's training emphasizes a marketing mix that includes direct mail, telemarketing and in-person sales.
Entrepreneurial professionals are usually distinguished by eagerness to apply and even invent new technologies to improve their businesses. Singer's organization has deployed a futuristic communications network that allows doctors using handheld computers to instantly check up on any of thousands of patients in a hospital. And Unger's Web-based business incorporation tools are providing him with the geographic reach and efficiency to greatly expand the market for his legal services.
The Jensens' accounting office has gone paperless, with all client records and forms scanned into a digital image storage and retrieval system that reduces costs while improving service. Says Todd, "When the client calls up and asks [me] to pull out the tax return from 2000, instead of going to a storage room and pulling out boxes, usually I have it faxed to him by the time I get off the phone."
There is good news about financing professional growth: Most professional practices have little difficulty obtaining financing from traditional sources such as banks. And with ingenuity, you can overcome the obstacles, such as ownership rules that restrict who can control equity in a professional practice.
Let's return to Rebecca Jensen. Although her practice is managed almost like a partnership with her nonaccountant husband, Rebecca lists herself as sole owner of The Accounting Source because of laws and regulations that require accounting firms to be owned by CPAs. Similar restrictions affect other professionals depending on the field and the jurisdiction, and similar methods can be used to deal with the restrictions.
Want to get a big edge over your professional competition? Change the way you make use of the capital you are able to raise. Professionals are generally more focused on doing things the way they were taught to do them than on spending to create new products, services and ways of doing business, says Unger. By spending six figures developing his Web-based incorporation service, he says, he's able to charge about half what a large corporate law firm would for an incorporation, while providing similar quality.
Get "Pro" Active
If you're starting to run your practice like an entrepreneur, it's not a moment too soon. "The attorneys picked it up quickly," says Mark Curtis, president of Curtis Marketing Group, a St. Joseph, Minnesota, marketing and advertising company that specializes in advising dentists and other professional service providers. "Dentists have been slower to get it, but another group that took to it quite well was plastic surgeons. And the accountants are starting to get it."
At the moment, you can learn a lot by looking at the professionals who are already acting like entrepreneurs. Unger is constantly developing new technology-based products that will reduce his costs and expand his market. The latest is an online service that reminds companies of the legal requirement to keep minutes of board meetings and eases the task with prepared forms-all for a fraction of the cost of hiring a law firm to record the meeting minutes. For Unger, it's all part of being an attorney-albeit one with an unusually entrepreneurial bent. "A typical lawyer might make an investment in furniture and maybe [produce] a brochure," he says. "I am making an effort to grow my firm in a way that's unique."